Cloudflare has teamed up with 10 cloud providers and hosting companies, including IBM Cloud and Microsoft Azure, to form the Bandwidth Alliance, an initiative that aims to reduce bandwidth costs for mutual customers.

As well as IBM and Azure, Cloudflare’s content delivery network (CDN) joins Packet, Scaleway, Vapor, DreamHost, Digital Ocean, Linode, Automatic, and BackBlaze as founding members of the alliance.

The Bandwidth Alliance will be underpinned by Cloudflare’s paid network traffic engine Argo. Cloudflare product director Rustam Lalkaka in a blog post: “Argo allows us to make decisions on how to carry traffic across our network in ways that optimize for a number of factors: latency, throughput, jitter, or in the case of the Bandwidth Alliance, cost to our partners to exchange traffic.

Argo, in short, offers more efficient routing than Border Gateway Protocol (BGP), a mechanism that allows routers to learn which networks have connectivity to which other networks and to pick optimal paths across those. (“Optimal” in terms of fewest number of network hops, not best performance or lowest monetary cost).

“We’re on the lookout for ways to help save our common customers money, the company said it a blog post. “That got us looking into why and how much cloud customers pay for bandwidth.

Cloudflare said that some customers with highly distributed infrastructures and bandwidth requirements can “find it daunting” to orchestrate workloads across multiple providers. Neither Cloudflare nor the cloud provider bears incremental costs for transferring data over a private network interface (PNI), the company said, which are used by cloud providers to connect to third-party networks, including Cloudflare’s.

$50M in Savings Estimated for Cloudflare Customers

“This got us to wonder: could we potentially create a new model and provide our mutual customers with lower costs?” the company said.

“We started talking to the most customer-friendly cloud providers that we exchange traffic with and proposed that we look at making our highly efficient and growing interconnects further benefit our mutual customers.”

bandwidth allianceEstimated savings for customers as a result of the Cloudflare alliance was put at nearly $50 million in data transfer fees per year.

Troy Hunt, security researcher and founder of Have I Been Pwned, tweeted that users will be able to “run your compute bits on @Azure, route through @Cloudflare and watch the bandwidth costs plummet”.

“I love this announcement because it ties together my 2 favourite things and massively drives the cost down,” he added.

“Whether it’s me trying to run @haveibeenpwned for peanuts or well-funded companies doing big things, this is massive news and I can’t wait to see it in action!”

Cloudflare added that it has implemented a new smart routing system for customers to be able to quality for these Bandwidth Alliance discounts. It also now has an agreement with other cloud providers to waive data transfer fees for mutual customers.

The benefits will be available to all Cloudflare customers at no additional costs, the company said. Some of the alliance partners required technical systems are already live, while others are planning to go live in the next few months.

The Bandwidth Alliance is already looking to build its member base; Cloudflare said other cloud providers or CDNs should get in touch.

Bandwidth Alliance: “Mega” Announcement

The announcement follows Cloudflare’s work with Google Cloud on the latter’s CDN Interconnect program. This is automatically discounting data transfer fees for customers of the two companies by up to 75 percent, Cloudflare claims.

Microsoft Azure is working on its own CDN interconnect program, Cloudflare added, which it is also a part of.

Read more: IBM Cloud Announces Global Network Availability Zones Expansion